Tom Scherrer, the runner-up at the Henrico County Open, and Andrew Pratt, who finished second at the Xerox Classic, are knotted in second place at 6-under-par 65.
Mike Heinen is alone in fourth place at minus-5.
Villegas parred his first two holes, then ran in a 15-foot birdie putt at the third. He collected back-to-back birdies thanks to a 12-footer at the fourth and made it three in a row at the par-5 fifth. Villegas' second landed in a bunker, but he blasted out to two feet and kicked in the short putt.
Villegas bogeyed the sixth to briefly stall his momentum, but he regained it. He sank a four-foot birdie putt and parred his last two holes to make the turn at 3-under 32.
At the par-5 11th, Villegas knocked a three-wood into a greenside bunker with his second. He blasted out to five feet and converted the putt to reach 4-under par.
He hit a 9-iron to six feet to set up birdie at the 12th, then collected his third birdie in a row at 13 when his 15-footer fell into the bottom of the cup.
Villegas rolled in a 25-foot birdie putt at the 15th to get to minus-7. He could have gotten lower, but missed a five-footer for birdie at the last.
'It was a good round,' said Villegas. 'I've got to keep it up. I did hit the ball good and rolled some good putts. Obviously, to shoot seven-under you've got to roll some good ones.'
Villegas has enjoyed an interesting season in 2005. He began the year with no status on the Nationwide Tour, but in his first event, Villegas tied for second. He earned Special Temporary Membership because of five top-10 finishes in his first 10 starts of the season.
He has six top-10s in all this season, but one thing missing is a victory. Villegas is ready to break through, but knows there is plenty of golf left in the tournament.
'I've just got to be patient,' said Villegas. 'Hopefully I keep striking the ball the way I did today and keep rolling it the same way. There's a lot of golf left.'
Tom Carter, Troy Matteson, Fran Quinn and Chad Collins are tied for fifth place at 4-under-par 67.
Defending champion Scott Dunlap is part of a group tied for 89th place at plus-two.
Saxophonist Kenny G is in last place at 11-over-par 82.